GGTM Law
GGTM Law
We are a client-centric boutique law firm in Muskegon, Michigan, comprised of experienced Muskegon attorneys committed to serving the legal needs of a wide variety of businesses and individuals in Muskegon, Grand Rapids, Grand Haven, Spring Lake, Holland, throughout West Michigan, and beyond.
Estate Planning/Probate/Oct 17, 2024

Estate Planning: Important Legal Tools You Should Have

12 min read

An Estate Plan is made up of many components, not just a single document. When assessing an estate plan, several legal tools, or documents, should be present to accomplish the goal of a complete and comprehensive plan. You have likely heard the term estate planning, but you may not be familiar with which legal tools typically comprise a complete estate plan. We want to teach you about the legal tools that should be included in your plan and what benefits and protections each legal tool can provide.

These important legal tools are: Will, Trust, Financial Power of Attorney, Designation of Patient Advocate (Medical Power of Attorney), HIPAA Authorization, Appointment of Guardian (for You) or your Minor Child, Temporary Guardianship or Delegation of Parental Powers.

Interested in learning more about an Estate Plan? Contact Attorney Chuck Murray to schedule a discussion today!

Will or Revocable Living Trust

As with many other structures, a well-rounded estate plan must be built on a solid foundation. To establish a foundation for an estate plan, the use of either a will or a revocable living trust (trust) is necessary. Wills and trusts are legal tools designed to direct and control the distribution of money and property and other assets that you own. While a will can only provide direction at death, a trust has the added benefit of providing direction in the event of your incapacity during your lifetime, as well as upon your death. Consequently, there are multiple considerations that go into whether using a will or trust as a foundational tool makes the most sense for your situation.

Will

A will as a foundational legal tool often requires that your property go through the probate process upon your death, although certain accounts and property can be transferred outside of probate through the use of beneficiary designations or if the account or property is jointly owned with a right of survivorship. Probate is the court-supervised process in which everything you own is transferred to your loved ones (also known as devisees, or heirs if you do not have a will) at your death. In your will, you elect an individual to be in control of carrying out your wishes and state who gets your accounts and property at your death. In Michigan this person is known as the Personal Representative. Prior to being able to carry out your wishes, the Personal Representative must be formally appointed by the probate court. Normally we nominate one person and an alternate nominee in the Will. It is very important that you meet with an experienced estate planning attorney to understand who to elect to serve in this role, as choosing the wrong individual can result in unnecessary delays.  Top

Trust

Alternatively, the use of a trust as a foundational estate planning tool can allow you to avoid the probate process. However, a trust can only avoid probate when bank accounts, personal and real property, and other assets you own are retitled into the name of your trust. This is known as funding your trust and is one of the most often missed tasks in creating a trust. At GGTM, we assist you in explaining the importance of funding, advising you of things you must do, and we follow-up a few months after you create your trust to check-in to see if you need additional guidance or help in funding your trust.  Once the assets are funded into your trust, either prior to your death or transferred to your trust at your death, they are available to your successor trustee to manage for your, or your beneficiaries’, benefit. The beneficiaries are those who receive gifts from your trust. Additionally, trusts have the added benefit of protecting your accounts and property that are part of the trust if you become unable to manage your own affairs, and also making them more accessible to your successor trustee to use for your benefit during your lifetime.

You may be surprised to find out that even when utilizing a trust as a foundational legal tool, you still need a will. The type of will used in conjunction with a trust differs from a standalone will. Instead, with a trust we prepare a pour-over will which essentially “pours” into the trust any accounts or property that were not titled in the trust at the time of your death. While a pour-over will ensures that accounts and property not funded into your trust during your lifetime are funded at your death, it also provides other essential benefits to focus your distribution plan primarily with the trust. However, we encourage our clients to fully fund the trust so we do not need to use the pour-over will as using the will indicates we need to establish a probate estate, which typically those with trusts are hoping to avoid doing. Ideally, the pour-over will is just a safety net in case something was missed or not properly assigned to the trust.

A testamentary trust is another tool that may be appropriate for you in certain circumstances. The terms of the trust are stated in a will during your lifetime and the trust is created upon your death. Like with a revocable living trust, you can customize the provisions that control the distribution of money and property through the trusts. However, this type of trust is created during the probate process.

There are a variety of considerations that go into whether a will or trust is the right foundational tool, which is why it is best to speak with an experienced estate planning attorney to help ensure you choose the right one for your unique situation.

Contact Attorney Chuck Murray today to schedule a meeting to discuss what type of will or trust best suits your needs.  Top

Financial Power of Attorney

You have likely heard the term power of attorney before. However, you may not realize that each financial power of attorney and the level and type of authority granted within it varies based on its contents. These legal tools can often be customized to accomplish specific goals. Michigan recently enacted new laws for the power of attorney authority. Older (called “vintage” powers of attorney) are still valid if properly prepared, but the new laws enacted some power changes. It is helpful to first understand the roles within a financial power of attorney. The person who creates it is known as the principal, and the person who receives the authority through it is the agent. An agent’s role is to act as a fiduciary and on behalf of the principal for a variety of purposes.

Under a limited power of attorney, the agent is limited to performing very specific duties, such as executing a deed for a real estate transaction or transferring a vehicle. On the contrary, a general power of attorney allows the agent to step into the principal’s shoes and manage almost all aspects of their finances and property ownership to the extent of what is allowable under state law.

A financial power of attorney can take effect immediately (or as soon as the agent has officially accepted the role) or it can be springing. A springing power of attorney requires that a certain event occur before the agent can exercise their power. This is usually upon the declaration that the principal can no longer act for themselves. It is important to note that not all states allow for a springing power of attorney.

Lastly, there is a durable power of attorney. A durable power of attorney lasts through the principal’sincapacity, making it crucial for being able to grant someone authority to act for you if you cannot act for yourself. Under Michigan’s old laws concerning power of attorney, the document had to specifically state it was “durable” else it was only valid while the principal was competent. Under Michigan’s new laws, it is presumed durable if the necessary documents elements are met and various institutions must accept the power of attorney if it is properly formatted and authenticated.

If you have questions on the power of attorney topic, please contact Attorney Chuck Murray to schedule a meeting.   Top

Designation of Patient Advocate (Medical Power of Attorney)

Our health and the way we manage it is largely dependent on our own beliefs and preferences. If you areunable to make your own medical decisions, you would likely want to make sure that the person making them for you is someone that you trust and who would follow your wishes. To have this control, your estate plan should include a patient advocate designation, commonly called a medical power of attorney. Michigan officially uses the term Patent Advocate Designation, but we still also refer to the person as a medical power of attorney. You will designate an agent, and possibly one or more successor agents, in your patient advocate designation to act on your behalf if your first choice is unavailable. You may also name co-agents if you wish. In Michigan these agents can only act on your behalf when your care team determines you cannot rationally decide for yourself – it is very specific to you and your care team on when that requirement is met.

A patient advocate serves the important purpose of following your direction concerning treatment options if you cannot participate in medical decisions, to include forms of end-of-life care you would like. Within this legal tool, you can memorialize your wishes concerning care and helping guide treatment until you regain the ability to decide on your own, or as it relates to being placed on life support if you are in a persistent vegetative state or diagnosed with a terminal illness with no probable chance of recovery. This legal toolshould not be confused with a do not resuscitate (DNR) order. A DNR order is not part of an estate plan and instead the DNR is filled out under the direct guidance and discussion with your physician.

Contact Attorney Chuck Murray to schedule a meeting to discuss options for your Patient Advocate Designation.  Top

HIPAA Authorization

Health Insurance and Accountability Act of 1996 (HIPAA) authorizations allow an individual to designate who the hospital or medical facilities can provide medical records and information to. These authorization forms became necessary following the enactment of the federal Health Insurance and Accountability Act of 1996, which provides guidelines to the healthcare industry for the protection of patient information. This is an important legal tool to have if you have multiple individuals who are not nominated under your patient advocate that you would like to have access to your medical information in the event of illness or injury. While these individuals will not have decision-making authority, they will be able to stay informed about your medical condition and ask questions of your care team.  Top

Appointment of Guardian (for You) or your Minor Child

Michigan allows you to nominate someone to act as your guardian, if one is needed, through either the Patient Advocate Designation or, since July 1, 2024, through the Financial Power of Attorney. It may also be addressed in a Will, but the Will is often the last document someone will seek due to its specific purpose (but if you only have a will as your sole estate plan document, it may be included there). The Patient Advocate Designation will take priority if a nominee is named in any other document.

Planning for minor children is a high priority for parents. As with nominating a guardian for yourself, Michigan allows these nominees for guardian of a minor child to be appointed through a Designation of Patient Advocate, a Financial Power of Attorney, or a Will. These tools allow parents to provide input on who should care for their minor child, and courts typically honor those requests unless there is a reason not deviate from that nomination.

We recently posted a guide on helping your adult children (those 18 and older) plan for their possible incapacity. See that article here.

Do you have questions on how to best nominate someone to care for you or your minor child? Contact Attorney Chuck Murray today and schedule a time to discuss options.   Top

Temporary Guardianship or Delegation of Parental Powers

There are circumstances in which you may not be able to be with your children, commonly due to extended travel. This can be an appropriate circumstance for you to name a temporary legal guardian to make decisions on behalf of your minor child while you are unable to do so. Michigan law allows an appointment for up to 6 months of temporary guardianships. This law applies to either guardianship of a minor child or, if you are a guardian of an adult ward, delegation of that authority as well.  Top

Already have an estate plan? We recommend reviewing it at least every 3 years. If during your review, or because of this article or some other conversation you had, you would like to discuss your existing plan or if you need to start a plan from scratch, contact GGTM Estate Planning Attorney Chuck Murray today and schedule a time to discuss your estate planning needs or updates.

Now that you have learned more about what tools should be present in your estate plan, you can ensure that you have all of the essentials in attendance when you begin the estate planning process. Contact Attorney Chuck Murray and schedule your appointment today!

GGTM Law
GGTM Law
We are a client-centric boutique law firm in Muskegon, Michigan, comprised of experienced Muskegon attorneys committed to serving the legal needs of a wide variety of businesses and individuals in Muskegon, Grand Rapids, Grand Haven, Spring Lake, Holland, throughout West Michigan, and beyond.

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